While the Japanese crisis remains important and the Libyan situation continues to develop, it is news from Europe that irked investors on Wednesday. After saying that the emergency fund had been agreed on for its nations that are experiencing financial difficulties, the E.U. has let it be known that in fact not all details have been agreed on, nor will the bailout plan be presented at the E.U. summit getting underway. The Portugal Prime Minister was forced to resign yesterday when its government would not approve austerity measures. There were reports that the S&P has said that European banks would have to put over 350 billion EUR into their banking system to bring them to standards being sought in the States. In addition to that Industrial Production numbers from Europe came in less than expected with a reading of 0.1% compared to an estimated gain of 1.4%.
Today Europe will release a host of Flash Manufacturing and Services PMI reports with Germany and France the focus. The German results are anticipated to be slightly below last month’s outcome. With all of these details listed the EUR did struggle against the USD on Wednesday, but it still remains within the higher parts of range against the Greenback and it will be more than interesting to see how the Single Currency does these final two trading days before going into the weekend. Many unknowns remain in the broad markets because of the huge amount of international news that is still evident. And the lack of clarity from the European Union have done investors no favors.
The USD traded in a steady to firm manner against most of the major currencies yesterday. It accomplished this even as the housing sector again produced news that was less than fantastic. New Home Sales disappointed investors yesterday missing their forecasted number widely. The housing news from the States remains ugly and shows little indication of picking itself up off of the floor. Today the U.S. will release weekly Unemployment Claims and Core Durable Goods. The jobless problems remain another difficult economic factor in the U.S. and the dent it is causing in the American psyche cannot be underestimated regarding spending. Tomorrow the Final GDP results will be tallied and investors will be keen to see if some glimmer of improvement is evident. Having traded in a particularly week manner the past couple of months in many respects, the USD has found some firmer ground the past two days. The question is if this is a short term move or a sign that the Greenback may actually begin to find renewed momentum via risk adverse trading.
The GBP lost ground on Wednesday. This came on the heels of rethinking as investors realized that they may have been a bit quick to predict that the Bank of England will raise their interest rates in the short or midterm because of higher inflation. The U.K. will release Retail Sales today and this will be of interest after suffering a rather bleak number last month. Bad weather has been blamed on poor consumer spending recently and it will be worth noting today’s result. The expected outcome is a minus -0.5%, not a particularly pretty projection for an economy which is experiencing slow growth. The GBP has been strong in recent trading and with so many questions continuing to mass over the U.K. economy some traders may be looking at Sterling as an opportunity.
The JPY remained in a consolidated hold for the bulk of the trading day. The AUD remained firm within its higher range. Gold has inched up to about 1438.00 USD as of this writing which is touching its record prices. Again, with so many unknowns (meaning risk events) still playing out globally investors cannot be faulted for looking at the precious metal as a safe haven. Crude Oil continues to be steady and with the crisis in Libya and the Middle East making news the commodity appears to have speculators wagering that it will remain strong.
Written by bforex.com
